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IP/Entertainment Case Law Updates

Blueport Company, LLC v. United States

The Federal Circuit affirmed a decision by the United States Court of Federal Claims dismissing a copyright holder’s claim for lack of jurisdiction on the ground that the U.S. government had not waived sovereign immunity.

Air Force Technical Sergeant Mark Davenport wrote a software program known as the “AUMD program” while working as a manager of the Air Force Manpower Data Systems. Although the program was written on his own time, and at home, Davenport then shared the software with coworkers for testing and eventually posted the software on the Air Force website to allow others to download the program. As he was continuously updating the program, he added an automatic expiration date that would cause a user’s version to stop working, requiring the user to download the latest version.

After much success, Davenport assigned all his rights in the AUMD program to plaintiff, Blueport Company, LLC. The Air Force refused to purchase a license to use the program from plaintiff and instead hired another firm to independently reproduce the software. The new firm modified Davenport’s object code to circumvent the expiration date protocol he had included.

Blueport then sued the government for copyright infringement in using the AUMD program and for violations of the DMCA from hiring the other firm to manipulate the code to extend the expiration date. The Court of Federal Claims (CFC) dismissed Blueport’s claims for lack of jurisdiction on the ground that the government had not waived its sovereign immunity and Blueport appealed.

The Federal Circuit began its review of the CFC’s decision by examining the scope of the government’s waiver of sovereign immunity for copyright infringement claims under 28 U.S.C. § 1498(b), which grants copyright owners a right of action for copyright infringement against the United States, subject to three provisos: 1) when a government employee “was in a position to order, influence, or induce use of the copyrighted work by the Government;” 2) when the work was “prepared by a person while in the employment of service of the United States, where the copyrighted work was prepared as part of the official functions of the employee;” and 3) when “Government time, material, or facilities were used” in preparation of the work.

As an initial matter, the Federal Circuit held that the provisos were exceptions to the waiver of immunity and therefore jurisdictional, placing the burden on Blueport to show its claims fell within the scope of the waiver.

Next the court explained that the copyright claims were barred under the first proviso of 28 U.S.C. § 1498(b) because Sergeant Davenport’s position gave him access and authority to distribute the AUMD program to his colleagues and therefore he was in a position “to order, influence or induce” the use of the program by the government. Since the court found that plaintiff’s copyright claims were barred under the first proviso, the court did not address whether plaintiff’s claims were also barred by the other two provisos.

The Federal Circuit likewise affirmed the dismissal of Blueport’s DMCA claims. The court explained that the DMCA does not contain any express waiver of sovereign immunity and a waiver should not be inferred as Blueport suggested. Finally, the court rejected Blueport’s argument that DMCA claims should be covered by the same immunity as copyright claims, noting that “the DMCA created new claims for liability that are separate and distinct from claims for copyright infringement.”